chart showing how parcel delivery revenue has increased over the last few years

Parcel Market Struggles to Keep Up with Rapid E-commerce Market Growth                

In the last ten years, the UK e-commerce market has grown 324% and is the third largest globally for retail sales. Although the pandemic caused high-street shop vacancies to soar, it was also a catalyst for significant growth in the e-commerce market, as retailers turned to alternative options in the face of government-sanctioned lockdowns.

In 2021, 79,000 additional e-commerce websites were launched in the UK compared to the previous year, contributing to a total of 580,000 active UK e-commerce sites. Data shows that 82% of UK internet users shopped online in 2021, more than any other country.

E-commerce Continues to Grow Despite Easing Restrictions Around the Pandemic

In 2022, UK shoppers spent £106 billion online, a 15% increase from just under£93 billion in 2021. Projections estimate e-commerce market value will reach £260 billion by 2025.

While projections show even greater growth for e-commerce businesses, the success of the sector relies on parallel growth in parcel delivery. Without a reliable delivery system, frustrated shoppers are more likely to turn to competitors or opt for in-person shopping.

Did Parcel Delivery Keep Up with the E-commerce Boom?

2015 2016 2017 2018 2019 2020 2021
UK Ecommerce revenue 42.6 billion 51.6 billion 59.9 billion 68.5 billion 75.4 billion 112.7 billion 129 billion
2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
UK parcel volume 1,991 million 2,145 million 2,365 million 2,614 million 2,823 million 4,141 million 3,934 million
UK parcel delivery revenue 7,600 million 8,443 million 8,976 million 9,638 million 10,309 million 10,485 million 13,999 million

Sources: Statista + Shiply + Statista

Between 2013 and 2021, the parcel delivery market also grew by 138% in annual deliveries, from 1.75 billion to 4.17 billion. However, recent data on fluctuating parcel volumes indicates that total parcel volume across all UK operators decreased between 2021 and 2022 by 5.7%, despite an increase in parcel revenue.

Despite the fluctuations the delivery market experienced between 2021 and 2022, shipping remains a vital part of the future of e-commerce and businesses. Companies will need to choose reliable couriers to meet the growing demand of an expanding e-commerce market.

Does Shipping Impact Shoppers?

The significance of fast delivery for online shoppers cannot be overstated. In 2022, 71% of UK shoppers highlighted the importance of express or next-day delivery options. This was a 6% increase on the previous year.

Customers’ expectations puts pressure on website owners to partner with reliable shipping solution providers. 20% of UK shoppers blame the brand or retailer when packages fail to arrive on time or are damaged. This means there is high potential for businesses to lose customers.

UK Survey: Shipping & Delivery Importance

Direct delivery to the door is important 46% of UK respondents
Next-day delivery has been an important factor in their online purchases over the previous year whether for all (18%), most (38%) or some (31%) of their orders. Remaining (13%) answered that it was unimportant.
Pay extra for next- or same-day delivery 12%

Source: Internet Retail Report

Despite rising expectations, only 60% of e-commerce sites offered free shipping to customers in 2021 and only 33% offered a next-day shipping option. Only 19% of ecommerce businesses in the UK use more than one courier, placing a heavy reliance on partnering with a courier that can deliver reliable, consistent, and quick services.

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